Job Openings Near Two-Year Low as Layoffs Jump Construction, leisure and hospitality and healthcare cuts drive March increase in layoffs By Gwynn Guilford
https://www.wsj.com/articles/u-s-layoffs-jumped-in-march-as-job-openings-fell-3805c6a1
Construction, leisure and hospitality and healthcare cuts drive March increase in layoffs
U.S. job openings dropped to their lowest level in nearly two years in March and layoffs rose sharply, in signs that demand for workers is cooling a year after the Federal Reserve began lifting interest rates to combat inflation.
Layoffs rose to a seasonally adjusted 1.8 million in March from the prior month, up from a revised 1.6 million in February, the Labor Department said Tuesday. The increase was led by job losses in construction, leisure and hospitality and healthcare industries—sectors that have driven job growth in recent months as tech, finance and other white-collar industries cooled.
Employers also reported a seasonally adjusted 9.6 million job openings in March, the Labor Department said Tuesday, a decrease from a revised 10 million openings in February.
Openings reached their lowest level in March since April 2021 and are down from the record 12 million recorded last March. But they remain well above levels before the pandemic and exceed the 5.8 million unemployed people looking for work in March.
“The labor market looks to be normalizing, and the big question is whether it stops at ‘normal’ or charges right through it to the point of contraction,” said Luke Tilley, chief economist at Wilmington Trust Investment Advisors.
Layoffs are approaching prepandemic levels as companies unveil high-profile job cuts, including Facebook parent Meta Platforms, Google parent Alphabet and Microsoft.
The March openings and layoffs report is among the last major releases ahead of the Federal Reserve’s monetary policy committee meeting on May 2-3. Officials are likely to increase interest rates again this week while debating whether that will be enough to then pause the fastest rate-raising cycle in 40 years. The benchmark federal-funds rate is currently at a range between 4.75% and 5%.
Tech, finance and other white-collar industries have cooled in recent months.
The Fed has aggressively raised rates over the past year to slow the labor market and overall economy and bring down high inflation.
Fed Chair Jerome Powell has highlighted the imbalance between job openings and available workers as a driver of rapid price increases, as strong labor demand can push up wages and flow through to higher prices.
Other employment measures show that the labor market remained solid but eased gradually in March. Employers added 236,000 jobs that month—strong by historical standards, but the smallest monthly gain in more than two years. The unemployment rate was 3.5%, near a 53-year low.
The Labor Department is set to release its April employment report on Friday.
U.S. economic growth cooled in the first quarter, with consumer spending and factory activity slowing recently. Wage growth and inflation remain elevated.
Layoffs fell in retail and warehousing industries in March, offsetting the overall increase, while manufacturing layoffs increased slightly, the Labor Department said.
Job openings have fallen sharply in northern Indiana over the past six months, with employers that had been looking for 10 to 15 workers now seeking just one or two, said Alyssa Chumbley, owner of an Express Employment Professionals recruitment business. Ms. Chumbley’s company focuses on white-collar companies in Chicago as well as steel-manufacturing businesses in northern Indiana.
The hiring slowdown reflects cooling overall demand as the economy slows, Ms. Chumbley said. But some roles continue to be hard to fill, such as skilled manufacturing jobs on evening and night shifts at factories.
“The supply is so small, they’re jumping ship whenever they can to go after the first shift positions,” she said, referring to the 9 a.m. to 5 p.m. work shift. “It’s no longer enough to pay them $5 or $10 an hour more. It’s really the schedule and flexibility, and maintenance technicians have the power to call the shots.”
Comments are closed.
